Workers' compensation insurance

Published 2026-06-12 · by Brokly

In plain terms: Covers medical costs and lost wages if an employee is hurt on the job; a certificate confirms you carry it (required in nearly every state).

Why it matters to you

It is usually the first insurance the law requires of you — in most states the duty starts with your first hire. It pays the injured employee's medical bills and part of their wages, and in exchange the employee generally can't sue you over the injury.

Where you’ll see it

State law triggers it when you hire; general contractors and clients also ask for proof of it on certificates. The rules — who counts as an employee, when coverage is triggered — are set state by state.

Related terms

Definitions describe how policies are typically structured — exact terms live in the policy. Not legal or compliance advice.

Sources: NAIC — Glossary of Insurance Terms (Workers' Compensation) (retrieved 2026-06-12) · NAIC — Small Business Insurance (retrieved 2026-06-06)